Fighting has resumed at Mosul Dam in northern Iraq with US jets spotted flying overhead, according to Sky sources.

Islamic State (IS) militants seized the strategically important site, which supplies water and power to millions of people down the Tigris river valley, nearly two weeks ago.

But US President Barack Obama announced on Monday that Iraqi and Kurdish forces had regained control of the hydroelectric facility with the help of American airstrikes.

He called it a "major step forward" in the battle against the extremist group.

However, as the Kurds were celebrating their victory at the dam, it appeared there were still remnants of IS in the area who were putting up resistance.

Mosul Dam. Pic: File

Sky's Alex Crawford, at Mosul Dam, said: "We heard firing behind us about 1km away. The president's son said he suspected some hardened IS fighters were in the south of the dam who had not been cleared from the area."

She added: "They are still clearly holding out and putting up some sort of defence."

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Gallery: IS militants lose control of Mosul Dam

A peshmerga fighter guards a front line position in fighting with Islamic State militants near Mosul

Crawford said she heard heavy machine-gun fire and possibly mortar shelling as well as jets overhead.

US fighter jets and drones have been attacking IS targets as they try to help push back the Sunni extremists who have taken over large parts of the north and west since June as Iraqi troops fled.

There is also fierce fighting near the centre of Tikrit, the hometown of former Iraqi leader Saddam Hussein.

Video:Sky Meets Islamic State Suspects

Iraqi forces have halted their advance to Tikrit, which was seized by IS two months ago, due to fierce resistance from the militants.

The Iraqi military had earlier shelled militant positions inside and outside the town, officials said.

Much of the fighting was taking place near the main hospital, more than two miles from the centre.